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How best to procure digital marketing services in APAC region?

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by Sakthi Prasad
3 September 2014

Digital Marketing is becoming a force to reckon with: the global online ad spend ranged between $118 billion and $120 billion in 2013. Of this, U.S., Europe and Asia-Pacific (APAC) accounts for 38.5 percent, 26 percent and 27.5 percent respectively.

APAC's online ad spend is now growing at 20-25% (CAGR) while U.S. and Europe grows at 10-12%.  APAC has already surpassed Western Europe in terms of online ad spend.  An overwhelming majority of spend goes towards search and display function that helps companies towards customer acquisition.

Thus far, global FBT, CPG and Pharma firms have not considered APAC as a strategic region for rolling out digital marketing initiatives because they were more focused on beefing up their digital presence in U.S. and Europe, whose markets, in turn, have begun to mature in the last few years.

However, the situation in APAC is rapidly changing - thanks to explosive growth in the number of broadband connections as well as web-enabled devices in the region. Owing to increasing digitization, global firms now want to roll out strategic digital marketing initiatives in the region.

On the one hand the APAC region is gaining more prominence. On the other, there is an acute information gap that global category managers find it difficult to fill.

When it comes to the U.S. and Europe markets, category managers know the market dynamics, consumer sensibility, consumer preferences, preferred digital medium of access; they also know about the digital marketing labels commonly used by their competitors, while having good insight about the supply market situation such as the number of players, their capabilities etc. Moreover, they benefit from possessing a well-established framework that helps them with "dos and don'ts" of procuring digital marketing services.

On the contrary, when it comes to APAC region, regional category managers often do not have the luxury of referring to a well-established procurement framework. And owing to the absence of an effective framework, regional managers often find it tough to efficiently procure digital marketing services.

During the Webinar, Beroe Analyst Koustav Chatterjee talked about how best to procure digital marketing services in APAC. During the webinar, Chatterjee also covered the desired procurement framework for digital marketing spend categories in APAC, which would help category managers to address their existing procurement constraints more effectively.

Key Takeaway

Procurement maturity assessment of APAC markets

Indication of preferred sourcing strategy -- Cost v/s Risk-Trade Off Analysis

Measurement of negotiation levers

Designation of cost saving potential

Supply outlook

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